Which of the following is not a valid defense for auditors' liability to third parties for ordinary negligence under common law?
A)The loss was caused by factors other than the materially misstated financial statements
B)Lack of proper standing (relationship)to bring suit in that jurisdiction.
C)Lack of a privity relationship with auditors
D)Third parties did not rely upon the financial statements

Question

Quizplus · Accepted Answer

Under common law, lack of a privity relationship is not a valid defense for auditors' liability to third parties for ordinary negligence, as third parties can still sue if they can prove reliance and damages.

Which of the Following Is Not a Valid Defense for Auditors